Equity AUMs for mutual funds hit record high in May
Mumbai: The total assets under management (AUMs) of Indian mutual funds edged lower at the end of May from the record highs scaled in April as investors pulled out money from liquid and money market schemes.
However, soaring equity markets send the equity AUMs to a new record.
The total AUMs of the MF industry dipped 1.16% to Rs. 19.04 trillion at the end of May, data from the Association of Mutual Funds of India (Amfi) showed.
At the same time, as benchmark equity indices recorded new highs in May, the net inflows in their schemes continued to be strong, driving the AUMs of equity schemes 2.60% higher to a record Rs. 5.84 trillion.
The benchmark equity index BSE’s 30-share Sensex rose 4.1% in May, its best monthly performance in a year. Net inflows into equity schemes during the month were Rs. 9,159 crore.
“The liquid money is usually of temporary nature, and there is not much of a trend to read in there,” said Gopal Agrawal, chief investment officer (equities) at Tata Asset Management Ltd.
“The continuous momentum, due to relative attractiveness of equity as an asset class, because of fall in interest rates, is supporting the inflows in the equity schemes. The medium to long-term view is positive,” said Agrawal.
Investments through systematic investment plans (SIPs) are picking up, said fund managers.
SIPs allow investors to regularly invest small amounts that go into equities instead of making lump sum investments at various points of time. Such investments are usually made on a monthly or quarterly basis.
“The trend until March has been that at least 3-4 lakh net new folios have been created each month,” said Harsha Upadhyaya, chief investment officer (CIO)-equity at Kotak Mahindra Asset Management Co. Ltd.
“This means fresh investments are coming in, and SIPs are gaining traction, and around Rs. 100-150 crore are being added through the SIP route to net inflows into equity schemes,” added Upadhyaya.